April 27, 2020

Warner, Kaine Push To Extend COVID-19 Economic Relief To 501(C)(6) Nonprofits

~ Virginia is estimated to have the third highest number of 501(c)(6) employees ~

WASHINGTON – Today, U.S. Sens. Mark R. Warner and Tim Kaine (both D-VA) urged Senate leaders to ensure that nonprofit organizations like regional chambers of commerce, state restaurant associations, and groups representing law enforcement are able to receive the financial relief they need during the novel coronavirus (COVID-19) crisis. In a letter, the Senators asked Senate leaders and leaders on the Committee on Small Business and Entrepreneurship to expand eligibility for the Paycheck Protection Program (PPP), which currently excludes worthy non-profits that are listed under section 501(c)(6) of the Internal Revenue Code.

“We’ve heard from many 501(c)(6)s that have been impacted by COVID-19 and are concerned that they will be unable to carry out their missions,” wrote the Senators. “Many 501(c)(6)s are struggling because of significant declines or uncertainty in their membership dues resulting from COVID-19, and many have had to cancel major events that they rely on for funding.”

They continued, “Throughout this pandemic, Congress has recognized that a whole of society effort is needed to combat COVID-19 and to mitigate its devastating economic impacts. Local chambers, for example, have been valuable partners in helping small business owners get up-to-date information about the assistance programs passed under the CARES Act. Law enforcement associations here in Virginia have provided vital information and training for their members related to COVID-19 as they keep our fellow citizens safe. Education associations have supported teachers and school leaders with webinars and other professional development resources as they abruptly transitioned to serving students through remote instruction.”

Virginia’s significant number of 501(c)(6) organizations include regional chambers of commerce, tourism and hospitality associations, medical associations, certified public accountant societies, state legal societies, state restaurant associations, groups representing law enforcement, among many others. According to some estimates, the Commonwealth has the third highest number of 501(c)(6) employees across the nation.

In their letter, the Senators also highlighted the essential role that many of these organizations are fulfilling during this challenging crisis. Specifically, the Senators requested that this PPP expansion be eligible for 501(c)(6) organizations that do not engage in substantial federal campaign or lobbying activities and can demonstrate economic hardship.

Text of the letter is available here or below.

Dear Majority Leader McConnell, Minority Leader Schumer, Chairman Rubio, and Ranking Member Cardin:

With your leadership, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136) to create the Paycheck Protection Program (PPP), a powerful program to support small businesses and some non-profits as they deal with the impacts of the COVID-19 pandemic. However, we have concerns that PPP’s eligibility criteria have shut out some worthy non-profits that are listed under section 501(c)(6) of the Internal Revenue Code. 

We’ve heard from many 501(c)(6)s that have been impacted by COVID-19 and are concerned that they will be unable to carry out their missions. Many 501(c)(6)s are struggling because of significant declines or uncertainty in their membership dues resulting from COVID-19, and many have had to cancel major events that they rely on for funding. We’re hopeful that as you consider modifications to the PPP, you will expand the program to include 501(c)(6) non-profits that do not engage in substantial federal campaign or lobbying activities and can demonstrate economic hardship.

501(c)(6) organizations include regional chambers of commerce, tourism and hospitality associations, medical associations, certified public accountant societies, state legal societies, state restaurant associations, groups representing law enforcement, among many others. Many of these 501(c)(6) organizations are filling an essential role on the front lines of our nation’s COVID-19 response, providing their members with services and guidance necessary to help them through this challenging time.

The Commonwealth of Virginia has a significant number of 501(c)(6) organizations and Virginians employed by them. According to some estimates, Virginia has the third most 501(c)(6) employees in the country. We’re proud of the work these Virginians do to support their communities and local businesses and do not believe they should be excluded from the PPP, which might be the deciding factor in whether their organization can keep its doors open.

Throughout this pandemic, Congress has recognized that a whole of society effort is needed to combat COVID-19 and to mitigate its devastating economic impacts. Local chambers, for example, have been valuable partners in helping small business owners get up-to-date information about the assistance programs passed under the CARES Act. Law enforcement associations here in Virginia have provided vital information and training for their members related to COVID-19 as they keep our fellow citizens safe. Education associations have supported teachers and school leaders with webinars and other professional development resources as they abruptly transitioned to serving students through remote instruction.

Thank you for taking this important consideration into account as you work to help our economy and communities cope with the economic impacts of COVID-19. We look forward to continuing our work together as we pursue bipartisan approaches to managing and overcoming this crisis.

 

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